April 22, 2002
Church pension fund uses clout to effect change

A UMNS Feature
By Tim Tanton

Human rights violations. Environmental issues. Money laundering. Predatory lending.

Those heavyweight problems are in the portfolio of a United Methodist agency that some might view as an unlikely advocate on social issues: the General Board of Pension and Health Benefits, based in Evanston, Ill.

In fact, the board wields considerable clout as the largest pension fund operated by any denomination. With more than $11 billion in its investment portfolio, it is a powerful behind-the-scenes force in nudging some of the biggest U.S. companies to change the way they do business.

The spring months are busy for Vidette Bullock Mixon and other staff members who deal with issues of corporate accountability. From March through May, they attend or keep tabs on some of the thousands of annual shareholder meetings held across the corporate world. Stockholders vote on resolutions and enact other business affecting their companies at the gatherings.

The board uses its rights as a shareholder to raise issues of concern with companies, says Bullock Mixon, director of corporate relations and social concerns. "Overall, it appears that companies are being responsive, at least to the general board as an institutional investor, and we're pleased that we can continue to be used as a change agent."

The board's Committee on Social Responsibility, using the United Methodist Book of Discipline, General Conference resolutions and other guidelines, annually evaluates social issues and determines which ones to pursue with its invested companies.

"We file approximately 25 shareholder resolutions annually on a variety of social issues," Bullock Mixon says. More than half will be withdrawn before the annual meetings roll around, as companies respond to the board's concerns.

That's fine with the board, which prefers dialogue to filing resolutions, Bullock Mixon says. With a filing, the representative of the resolution only has a few minutes during the annual stockholders' meeting in which to make a presentation, which is followed by the company's response and the vote. However, if a company's management is willing to enter into dialogue, the board could get 90 minutes to two hours in a private meeting or conference call. That's a better way to get information, share concerns and achieve a meeting of the minds on complex social issues, Bullock Mixon says.

Ensuring inclusiveness

Of 24 resolutions that the board has filed this year, it already has withdrawn 11 because of subsequent conversations with the companies involved, Bullock Mixon says. About half of the resolutions will remain on the ballot or possibly come to a vote. Occasionally, a company will use its right to challenge a resolution by asking the Securities and Exchange Commission for permission to omit it.

The board is invested in about 2,500 companies in the United States and elsewhere, and it casts its shareholder votes with each one, says Laurie Michalowski, coordinator of socially responsible investing. "We also do a very careful review of the composition of the boards for all of our companies. It's a very high priority for us." The agency checks on whether each company board is inclusive in terms of gender, racial and cultural background, and whether it has a good mix of directors from outside the corporation.

Bullock Mixon has a staff of three other full-time employees and an intern. They increase their impact by partnering with other institutional investors, encouraging them to co-sponsor resolutions and, in turn, serving the same role for resolutions filed by others. That kind of partnership, coordinated through the Interfaith Center on Corporate Responsibility (ICCR) in New York, spares agency staff from attending every annual meeting where a resolution of interest is considered.

The board has been the primary filer in dealing with key companies such as Wal-Mart, Disney and Nike on topics such as sweatshop conditions in supplier factories and other vendor standards, according to the Rev. David Schilling, a United Methodist and director of global corporate accountability programs for the interfaith center. The board has taken the lead in working with those companies, building consensus with other ICCR members around issues and organizing meetings with management, he says.

"The board has been good at commending companies when they've made changes and continuing to press (them) to make improvements," he says, "and I think that's been a very important contribution to the shareholder work."

Relationships with Wal-Mart, Disney and Nike began with the filing of shareholder resolutions asking the businesses to develop comprehensive codes of conduct, encompassing labor and human rights standards, fair wages, monitoring and reporting back to stockholders.

"Wal-Mart has not been eager to do public reporting, but because of the dialogue that has been led by the board, in February the company released its first report É on supplier standards and its compliance programs," Schilling says. "É The board's work with Wal-Mart has helped make this a reality."

The Interfaith Center on Corporate Responsibility has 275 religious institutional members, at least 100 of which are actively involved in filing shareholder resolutions and engaging in dialogue with companies, Schilling says. "In this past year, there were 144 resolutions filed with 99 companies by religious investors through ICCR." Those businesses don't include additional companies such as Nike, which ICCR members may spend a lot of time working with outside the shareholder resolution process.

Influencing the leaders

The board often files its resolutions with the largest companies in an industry, such as Wal-Mart among retailers, Nike among footwear manufacturers and McDonald's among restaurant companies. "If you can influence the larger key players, then oftentimes others in the respective industry will tend to model the best practices of some of the larger corporations," Bullock Mixon says.

As a major institutional investor, the board often has large stakes in those companies. "If the general board has a million shares in Wal-Mart, that gives us additional influence and enables the company to sit down and talk to us as a large stakeholder and a long-term investor in their company," Bullock Mixon says.

The board's investments are screened to ensure that church dollars do not support companies that derive more than 10 percent of their revenues from alcohol, tobacco, pornography, gambling and armaments. The agency also invests more than $700 million in affordable housing and says its program is the largest operated by a denomination.

Historically, shareholder resolutions on social issues rarely get high percentages of votes.

"Shareholder resolutions are advisory at best," Bullock Mixon says. "Even if a resolution should get in excess of 50 percent, it's not mandatory that a company would have to take the action called for."

However, even a double-digit percentage vote is a sign that a resolution reflects something that shareholders are concerned about, and companies take notice of that, she says. Other groups, such as employees or college students, could also be focusing attention on the same concern, and the combination of those forces & and concern for its own reputation – could push a company to respond.

Effecting change can be a long-term process. The board filed its first shareholder resolution on U.S. companies doing business in Mexico in 1992. Today, labor conditions in border factories, or "maquiladoras," continue to be a concern, as evidenced by the March trip that a group of board members made to Tijuana.

The pension board's resolutions address diverse concerns. This year's crop focuses on:

__Environmental issues, such as the use of chlorine compounds in bleaching paper, genetically modified foods, global warming, energy sourcing, the use of polyvinyl chlorides and indigenous peoples' water rights.

__Diversity and equality, such as diversifying boards of directors, addressing glass-ceiling issues and supporting equal employment opportunity reporting.

__Finance, specifically detecting money laundering.

__Global accountability and corporate governance, such as human rights issues in Myanmar (formerly known as Burma) and global labor standards for suppliers.

__International health, calling for drug-pricing restraint and addressing HIV/AIDS – particularly in Africa – malaria and tuberculosis.

__Militarism, addressing arms sales and "weaponization in space" contracts.

For the last two years, predatory lending has been a focus for the board's resolutions, Bullock Mixon says. That has meant targeting companies that provide credit to people with low incomes or poor credit histories.

A new issue for this year has been money laundering, and the board is working with banks and other financial institutions to address that concern. The agency has had conversations with the managements of Fleet Boston, Merrill Lynch and Citigroup about adopting more robust systems for scrutinizing financial transactions and detecting possible money laundering, Bullock Mixon says. As a result of that progress, the board has withdrawn resolutions that it filed this year with the three companies.

On another front, the board is working with food companies, such as grocery chains, encouraging them to address concerns about genetically modified food. It has called on retailers such as Albertson's to make consumers aware that a private-label product contains genetically modified food, and it has obtained a commitment from Whole Foods, an organic store chain, to make information available in its stores about genetically engineered products and to consider re-labeling several private-label items.

The public perception of what constitutes a responsible company is changing, according to Schilling. It's no longer enough for a company to be viewed as responsible if it maximizes shareholder value, creates jobs and pays taxes. Now, people perceive that a responsible company also must contribute to the betterment of society, he says. "There's a huge shift that's taken place over the last five and 10 years, and we're beginning to see the results of that."

Tanton is news editor for United Methodist News Service.
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April 22, 2002
Budget constraints continue for mission agency

STAMFORD, Conn. (UMNS) – The United Methodist Board of Global Ministries, like many other organizations, benefited from the robust economy of the late 1990s.

The benefits were so great that the agency authorized $60 million in new mission programs, financed by unrealized capital gains, between 1997 and 1999. Another $12 million was advanced to the Missionary Health Benefit Trust. But the use of capital gains in this way would later prove to be "problematic," according to Stephen Feerrar, who became the board's treasurer last November, and the current funding shortfall is expected to continue into 2003.

Feerrar's report to directors during the April 15-18 Board of Global Ministries meeting provided some background to the agency's fiscal problems, which resulted in a 20 percent staff reduction last October and spending cuts in office operations, materials and services, program expenses and staff travel.

While capital gains on the board's investments yielded nearly $125 million from 1997-99, total assets grew only $49 million during that period. The growth in program expenditures was accompanied by a 22 percent increase in support costs and although administrative costs were kept to 10 percent of total expenditures, that still represented a 40 percent increase from 1997.

"Such growth would have been a proud achievement for many commercial companies in the go-go times of the late 1990s," Feerrar said. "Having been responsible for international finance in my previous job, I know how difficult it is to expand internationally. I can sincerely appreciate the challenges placed on an organization trying to expand globally at this rate."

With the new century came a reduced allocation of denominational revenues, mounting pressures on denominational agencies to lower their reserve funds and the responsibility of new, unfunded mandates from General Conference, the denomination's top legislative body.

Although the stock market declined in 2000, a recovery seemed possible the next year, until the devastating economic impact of the Sept. 11 terrorist attacks.

"While we had expected to book gains of about $10 million per year in 2000 and 2001, we actually booked losses of about $13 million each year," Feerrar explained. "Those $23 million annual swings effectively eliminated all the increases in net assets of 1997-99. This was a huge turnaround from our expected plan."

For 2002, support expenditures are budgeted at $13.6 million, 29 percent below the 1999 level and controls are in place to keep that number below $13 million if funding does not meet budget expectation, he said. Last October, board directors also redesignated $8.9 million to balance the 2002 budget.

Excluding specified funds of the Women's Division and Health and Welfare Department, the Board of Global Ministries' unrestricted assets have declined by $72 million since 1998, from $113.8 to $56 million. But if some of those remaining assets were used, such as pre-funded pension costs, it would affect future cash flows. "We have limited liquidity in the board's unrestricted asset pool," Feerrar reported. "This is the major reason for the cash flow restrictions currently imposed on our program funding."

Financially, he said, the Sept. 11 attacks affected the agency directly and indirectly, from the obvious loss of investment income to the effect of rapid interest rate cuts on the United Methodist Development Fund to expected 50 percent increases in liability insurance costs.

Outside of the insurance increases, spending has been kept at 80 percent of budget for the first quarter of 2002, according to the treasurer. "Despite all this progress, expenditures in 2003 will require significant changes to meet the funding gap now foreseen," he added.

Feerrar encouraged every director to become involved in fundraising efforts for the agency and some made pledges to do so during the meeting.

In other business, directors received an update on the search for a new chief executive to succeed the Rev. Randolph Nugent, who will retire at the end of the year. Bishop Joel Martinez, San Antonio, board president and search committee chairman, reported that the application period closed March 31 and that 27 candidates were being considered. A Stamford, Conn.-based firm has been hired to assist with the process.

The search committee met again on April 18, at the conclusion of the board meeting, to review the applications and narrow the pool of candidates. Interviews will be conducted in July and a recommendation made to the board's personnel committee at the end of August. That committee will convene in September and is expected to present a nominee to the board's annual meeting in October.

Board directors also:
__Had a welcoming service celebrating its new mission in Bermuda, involving Methodist churches formerly associated with the United Church of Canada.

__Heard a presentation by the National Committee on Ministries with Deaf, Late-Deafened, Hard of Hearing and Deaf-Blind Persons; and

__Greeted representatives of the mission agency's Russia Initiative, which marks its 10th anniversary this year.
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April 25, 2002
Federation wants nonviolent solution in Middle East
By United Methodist News Service

The Methodist Federation for Social Action is officially calling for a nonviolent end to the Israeli-Palestinian conflict.

Meeting April 18-21 in Chicago, the board of directors of the unofficial United Methodist group also wrote a letter to President Bush, calling for an immediate end to military action in Afghanistan and urging him to "halt our military aggression in the region."

The statement on the Middle East conflict affirmed the use of nonviolent resistance by both Palestinians and Israelis. "We believe the Palestinian people have the right to live in freedom and peace, in a nation unoccupied by an oppressive, foreign military force and in Israel's right to live within secure borders," it said.

To facilitate the return to pre-1967 borders, the removal of all Israeli settlements from the West Bank and Gaza and the establishment of Jerusalem as an international city, the statement called upon Israel to withdraw all military forces from the occupied territories.

The organization urged the United Nations to establish a peacekeeping mission there and the U.S. government to support such a mission and refrain from unilateral action. The statement also called upon the United States to "stop military assistance and arms exports to the region," as advocated by the 2000 United Methodist General Conference, the denomination's top legislative body.

The Middle East statement and Afghanistan letter were crafted as the MFSA board members spent long hours in dialogue about world events, according to the Rev. Kathryn Johnson, MFSA executive director. That dialogue included a presentation by Bishop C. Joseph Sprague of Chicago and a working session with the Rev. Martin Deppe, a retired clergy member in Northern Illinois.

On other social justice issues, the organization's board celebrated the recent release of former death row prisoner Ray Krone of Arizona and encouraged members and the church at large to continue working toward abolition of the death penalty; affirmed the recent U.S. Senate vote to refrain from drilling in the Arctic National Wildlife Refuge; and condemned racism of all kinds, especially the use of racial profiling.

The Rev. Joe Agne of New York and Marcia Hauer of Oregon were elected as the organization's new co-presidents. At its annual Ball Awards banquet, the Rev. Stephanie Anna Hixon and Cecelia M. Long were honored for their past decade of work with the United Methodist Commission on the Status and Role of Women.
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April 25, 2002
United Methodist Men forms program with Camp Fire USA

By Rich Peck

NASHVILLE, Tenn. (UMNS) – A United Methodist agency is teaming up with Camp Fire USA to offer a new program designed to strengthen family relationships.

The program is called Community Family Clubs, and United Methodist churches in Dallas, Chicago, Atlanta, Oklahoma City and Kansas City, Mo., are trying it out. The Commission on United Methodist Men is coordinating the effort, supported by a grant from the denomination's World Service Contingency Fund.

Camp Fire USA, formerly Camp Fire Girls, is a 92-year-old Kansas City-based organization that focuses on building caring and confident youth.

The United Methodist Church has had a long relationship with the Boy Scouts of America and Girl Scouts of the USA, but it has never done much with Camp Fire USA, according to Larry Coppock, staff executive for youth-serving agencies at the men's commission in Nashville. The creation of the Community Family Clubs is a major way for United Methodists to become more actively involved with Camp Fire USA, he said.

"I can envision local churches using this program as a way to minister to local residents long before they begin attending worship services."

Community Family Clubs is a "small group model" that offers coeducational youth development programs for parents and children, said Marian Long, senior program director of the Georgia Council of Camp Fire USA in Atlanta. Using Camp Fire USA curriculum, the concept involves the entire family in asset-building activities and experiences.

The clubs consist of at least 10 families that meet monthly, work on at-home projects, participate in field trips or special events, and engage in informal activity nights. The model is designed to increase opportunities for parents and other caring adults to volunteer in activities that allow them to interact positively with children and teens. Community Family Clubs are flexible and can be held in schools, churches, corporations and child care settings.

Greg Ferguson, director of expansion for Camp Fire USA, said the new program gives United Methodist churches an excellent way to reach out to their communities. "Many families attracted to (the clubs) will meet other families affiliated with the church and may become involved in the church because of those friendships," he said at a recent workshop for United Methodist Men.

New Hope United Methodist Church in Atlanta served as pilot site for developing the program. The church participated in activities that helped it in numerous ways, especially by bringing new families into the congregation, Long said. The congregation began to see the club as a mission, one that provided the church with avenues to establish Christian education. This club is "extremely" diverse in its family composition, she said. It consists of one nuclear family as well as others led by grandparents, aunts, uncles and foster parents.

A monthly club meeting includes early-bird activities, a family meal, a large-group session and age-group programs. Some activities are designed to help young people embody the signs of maturity as outlined by the Search Institute, a Minneapolis-based organization that promotes the well-being of adolescents.

The clubs are designed to help young people develop:

• empathy, sensitivity and friendship skills;
  
• comfort with people of different cultural, racial and ethnic backgrounds;
  
• relationships with three or more non-parent adults;
  
• appreciation for music, theater or other arts;
  
• ability to resolve conflict nonviolently;
  
• ways to plan ahead and make choices;
  
• high self-esteem and a sense of purpose; and
  
• optimism about the future.
  

Ferguson said the Community Family Club in Dallas has already divided into two 50-member groups. Additional experiments are scheduled to begin this fall with United Methodist churches in Lakeland, Fla., Buffalo, N.Y., Los Angeles, Columbus, Ohio, and Seattle, he said. If experiments with United Methodist churches continue to show promise, the effort will be expanded to other faith groups, he said.

For more information, contact Ferguson at (816) 756-1950, info@campfireusa.org, or Larry Coppock at (615) 340-7149 or lcoppock@gcumm.org.

Peck is communications consultant for the Commission on United Methodist Men.
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April 30, 2002
Large churches must change mindset, speakers say

By Jackie Campbell

PITTSBURGH (UMNS) – Leaders attending a conference of large membership churches were challenged to make a difference and learn to do ministry in today's world.

"If you try to do church today the same way you did five years ago, you're not going to make it," said the Rev. John Ed Mathison, pastor of Frazer Memorial United Methodist Church in Montgomery, Ala.

"Make a distinction between the things that are changeless – like the message of the Gospel – and leave them alone, (and) change the things that must change," he said. A change in mindset is needed in a lot of areas, such as church staffing, worship and how evangelism is viewed, he added.

Mathison was one of several nationally recognized speakers providing insight to nearly 350 leaders of large congregations who gathered at Christ United Methodist Church in Bethel Park, south of Pittsburgh, April 22-25. The conference provided a setting for receiving information and new ideas. Participants also visited other large churches in Western Pennsylvania, including a Presbyterian and a Christian Community church.

It's not coincidental that the growing churches are those that have pastors and staff with long-term tenure, Mathison said. "I'm tired of hearing about how we are going to lose members. To make disciples doesn't mean you've got to just take in Methodists who move. If you are not receiving a lot of people on profession of faith, you're in trouble."

To make new disciples, both Mathison and the Rev. Leonard Sweet agreed that churches must call off the "worship wars."

"We ought to be open to all different ways to worship," Mathison said. "The larger the church, the more options we ought to offer." He pointed to his own congregation, which started a contemporary service at the same time as a traditional service. The contemporary service drew enough people that the church had to add another, and the traditional service continued to attract worshippers. During Mathison's 30 years of leadership, Frazer Memorial has grown from 400 to7,400 members and has an average weekly worship attendance of more than 4,500.

The Large Membership Church Conference is held annually, sponsored by the United Methodist Large Church Initiative Committee and the denomination's Board of Discipleship. A large church is defined as one with 350 people or more in average weekly worship attendance. In the United Methodist Church, more than 1,400 churches fit the designation. The initiative encourages large churches to support one another and share information.

Several speakers at the April 22-25 event stressed that worship styles are a matter of preference, and that there's not one right way to hold a service.

Sweet, an author and consultant on cultural change, used shoes to illustrate his point that too many church leaders are wrapped up in "categorical imperialism" – imposing their preferences on others.

"I'm a boomer, and I wear a quality shoe," he said, waving his leather slip-on loafer in the air. Pulling a younger man from the audience, Sweet took his shoe – a thick-soled, hiking shoe Ñ and questioned its look and practicality. Shoe preference, perhaps like worship preference, is a generational, cultural thing, he said.

"I can either insist that they have a quality shoe like mine," he said, "or insist that their sole has protection and is covered, and I let them chose the kind of shoe that will cover and protect them." It's like that in worship wars, Sweet noted. "We are so wrapped up in categorical imperialism that we don't know there's a whole world out there in need of the Gospel."

Reading a biblical passage, Sweet noted that Jesus called Lazarus to come out of the tomb, then told the disciples to unwrap him. Like Lazarus, God has given us the freedom, but "we have failed to unwrap each other for ministry in this new world." The ministry is up to us, he said.

"We are not some divine employment agency that dispatches the deity to do our work for us," he pointed out. "What," he asked, "are you wrapped up in?"

Many people, he said, are wrapped up in their learnedness – still trapped in the culture that existed when they studied for ministry.

"I was a learned professor until about 1987," Sweet said. "I am now a learner." He used the analogy of pet alligators to illustrate his point.

"If you keep an alligator in the box, it will never grow any bigger than the box," he said. "It's only when you take it outside the box that it grows until the day it dies."

Sweet challenged church leaders to be like Jesus and "come down and take the form of a servant" to do ministry.

Churches' methods and ministries must also change, Mathison said. He suggested that church leaders equip "lay folks to do ministry and them turn them loose to do it."

Lay members at Mathison's church proposed launching what proved to be a popular 6 a.m. weekday Bible study, as well as a successful Christian television network and several other ministries. Ninety percent of Frazer's 7,000-member congregation is involved in some ministry.

"It doesn't always have to come down from (denominational agencies in) Nashville or the senior pastor or the staff to work," Mathison said. "Lay people are some of the most creative people around. If you are willing to give them the opportunity to just turn them loose to do ministry, unbelievable things can happen."

Campbell is a staff writer for the Interlink, the newspaper of the United Methodist Church's Western Pennsylvania Annual Conference.

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